Economic Week In Review | Issue 317 | 21 February 2022
Materials, goods and products
Oil prices have fallen as hopes increase for a diplomatic solution over the crisis in Ukraine as the leaders of Russia and the US agreed to meet.
Timber | The Timber Trade Federation commented that prices are being driven by labour and logistics costs. It also noted that supply may tighten later in 2022 as a globally buoyant construction industry seeks out lower-carbon construction materials.
UK construction and property news
New build housing delivery fell 11% year on year in 2021, with just 221,000 homes delivered (26% below target). Analysis by LandTech suggests that the pandemic, supply chain problems, labour shortages and financial constraints were all to blame. 51 authorities face a “presumption” penalty for not achieving targets. This bars them from using planning powers to stop any applications which meet the NPPF’s definition of sustainable development.
Shopping centre values | Princes Mead shopping centre in Farnborough is for sale at £17m despite being sold in 2011 for £26.3m.
Development lots | Savills was reportedly “surprised” when a number of lots remained unsold. 79% of its 124-lot catalogue was sold.
Building safety | New amendments to the Building Safety Bill are being proposed to make the industry pay to remove cladding and to protect leaseholders. The additions will give extra powers to stop developers from using shell companies to mitigate responsibility and allow building owners and landlords to take legal action against manufacturers. The power will stretch back 30 years and allow for recovery of costs already paid out. The British Property Federation said that it did not expect the “wide-ranging powers that the government is taking. It certainly does ring alarm bells” with others pointing out that it “rips to shreds” the concept of limited liability.
Fire evacuation | The mayor of London has drafted a new Fire Safety London Plan which will require new high-rise buildings to have more than just one staircase escape route. The Plan is up for consultation until 20th June 2022
Architect sentiment | The latest RIBA survey revealed that 31% of practices expect workloads to increase and just 13% foresee a decrease.
Trade | A survey by the British Chambers of Commerce has found that UK exporters say that the Brexit trade deal is bad for business, pushes up costs, increases paperwork and creates delays. Only 8% of firms said that the agreement enabled their business to grow or increase sales.
Migrant worker shortage | Analysis by the Resolution Foundation suggests that whilst immigration is seen as a driver of a low-wage, low-productivity economy, restricting freedom of movement will not automatically deliver improvements. Instead, firms may look to use labour-saving technology instead – leading to fewer jobs or choose between increasing pay and increasing prices. It points out that total migration has been responsible for 77% of labour market growth between 1994-2019 with EU workers making up 34% of total growth, more often than not working in low-paid roles, and that an immigration strategy is no replacement for a full economic strategy.
UK services staged a stronger rebound than expected in February as Covid restrictions were relaxed. The travel, leisure, and entertainment industries all saw growth which pushed the overall services PMI up to 60.8, the highest for 8 months.
Brexit | An EU-UK Joint Committee will take place on Monday. The agenda is expected to focus on the dispute over the protocol on Northern Ireland.
France | Business activity in France grew more strongly than forecast in February with IHS Markit recording a PMI of 57.9, up from 53.1 in January. It was helped by an improvement in Covid, which led to the easing of restrictions.
Germany | Producer prices in Germany grew at the fastest rate in 73 years, ahead of estimates. The cost of inputs for manufacturing rose at an annual rate of 25% in January, from 0.9% in the same month a year earlier. Economists had expected an increase of 24.2%.
Published every six months, our Tender Price Index is an analysis of inflation price deviation in construction prices. Click on the link above to view our most recent Index.
Friday to Friday
Price / Index
Week % change
Annual % change
$ per £
€ per £
Brent Oil $/barrel
As well as navigating through the global rebound which is increasing wages and demand for goods, construction is also having to navigate a rapidly changing regulatory landscape. Yet, despite the number of hurdles and pressures, sentiment is becoming increasingly positive with schemes pushing forwards and pipelines becoming more secure.
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